🪟Withdrawal windows and Rage quit
In the current version of the Aspis Protocol, we have implemented the traditional approach to withdrawals from the Vault and profit/loss fixation.
Withdrawal of assets from the fund without an early capital redemption fine (rage quit fine) is possible during withdrawal periods (aka withdrawal windows). During this withdrawal period, the investor may burn any number of his LP tokens and receive a pro-rata portion of the fund's assets with the performance fee applied (if any) and fund-management fee.
To protect investors and provide greater flexibility for them while also keeping the manager's interests in mind, we've implemented an open door with a fine approach. To put it shortly: you can get out any time, but if you get out while the withdrawal window is closed, then you will need to pay a fine for early redemption aka "Rage quit".
"Rage quit" (aka early capital redemption fine) provides greater protection for the Vault participants while also increasing transparency. This mechanism allows them to withdraw their assets from the fund at any time. by paying a Rage quit fine, which is calculated as a fraction of the LP tokens withdrawn.
This mechanism is designed to allow investors to withdraw assets from the fund if they want to.
Vault lifecycle can be seen below:
Vault Creation & Fundraising period (If user withdraws his funds right after depositing, rage quit fine is applied)
Freeze period (Rage quit applies on any withdrawal)
Withdrawal period (Users can withdraw their funds and rage quit will not be applied)
Then, the Freeze period follows the Withdrawal period infinitely.
At any time, a new fundraising period may start if participants vote and execute such a proposal
The corresponding periods start on the date following the end date of the fundraising phase. The countdown after fundraising is finished starts with the freeze period.
When you create a vault, simply specify this Rage Quit fine that will be deducted from the assets withdrawn by Vault member, which will stay in the Vault and automatically distributed among all LP holders proportionally (Number of LP tokens burned more than capital being withdrawn from the Vault).
Rage Quit is applied when investor is burning his LP tokens (withdrawing his funds) from the vault outside of the withdrawal window or during fundraising period to balance the incentives between the manager and investors.
Rage quit fine is provided as compensation to fund participants for unplanned withdrawals, which in some cases may disrupt the fund's strategy implementation.
When a user is paying Rage Quit fine, this rage quit fine is distributed among all Vault participants and not the profit of the manager. So, for example, when the user is paying a 10% Rage Quit fine from his deposit, this value is being distributed among all Vault members proportionally to their LP tokens holdings.
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